In a company's first year in operation, it made an annual profit of \( \$ 204,000 \). The profit of the company increased at a constant \( 18 \% \) per year each year. How much total profit would the company make over the course of its first 24 years of operation, to the nearest whole number?
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To find the total profit over the company's first 24 years with a constant annual profit increase of 18%, we can use the formula for the sum of a geometric series. The profit in the first year is $204,000, and each subsequent year it increases by a factor of \(1 + r\), where \(r = 0.18\). The total profit \(S\) for 24 years can be calculated using the formula: \[ S = P \cdot \left( \frac{1 - (1 + r)^n}{1 - (1 + r)} \right) \] where \(P\) is the first year's profit, \(r\) is the growth rate, and \(n\) is the number of years. Here, \(P = 204,000\), \(r = 0.18\), and \(n = 24\). \[ S = 204,000 \cdot \left(\frac{1 - (1 + 0.18)^{24}}{1 - (1 + 0.18)}\right) \] Calculating the sum gives us: \[ S \approx 204,000 \cdot \left(\frac{1 - 11.021}{-0.18}\right) \approx 204,000 \cdot \left(\frac{-10.021}{-0.18}\right) \approx 204,000 \cdot 55.661 = 11,363,922 \] Thus, the total profit over the first 24 years of operation is approximately \(\$11,363,922\).